Express Scripts Judge Asked to Stop Medco Assets Combination
Stock Chart for Express Scripts Holding Co (ESRX)
Pharmacy trade groups seeking to stop Express Scripts Inc. (ESRX) from acquiring Medco Health Solutions Inc. asked a federal judge to block the companies from combining assets while their lawsuit is pending.
The National Association of Chain Drug Stores, the National Community Pharmacists Association and independent pharmacies filed the emergency request to “hold separate Medco’s assets and operations” today in federal court in Pittsburgh, hours after the $29.1 billion merger closed following clearance by U.S. regulators.
U.S. District Judge Cathy Bissoon scheduled a phone conference with lawyers for tomorrow.
“Unless enjoined by this court, plaintiffs will suffer immediate and irreparable harm resulting from an imminent and irreversible reduction to competition caused by the intermingling of information and assets held by the defendants,” the groups said in the filing.
The trade groups sued Express Scripts and Medco on March 29, claiming the deal would violate antitrust laws by reducing competition and raising consumer prices. They filed a request for a temporary restraining order the following day.
“We think the suit is without merit,” said Express Scripts spokesman Brian Henry in an e-mail, speaking on behalf of both companies.
Express Scripts, based in St. Louis, agreed in July to buy Franklin Lakes, New Jersey-based Medco, saying that consumers would get more power to negotiate prices from the combined companies. The deal creates the largest pharmacy benefits manager in the U.S. The companies act as middlemen among drugmakers, pharmacies and health-plan sponsors to manage patients’ benefits.
The Federal Trade Commission approved the purchase by a 3-1 vote today. Clearance was unconditional, with the commissioners saying their eight-month review of the deal found “a competitive market for pharmacy benefit management services.”
The case is National Association of Chain Drug Stores v. Express Scripts, 2:12-cv-00395, U.S. District Court, Western District of Pennsylvania (Pittsburgh).
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